Offshore drilling contractor Seadrill has emerged from its second bankruptcy in four years after successfully completing its reorganization pursuant to its Chapter 11 plan of reorganization.
The restructuring “significantly delevered” Seadrill’s balance sheet by turning approximately $4.9 billion of secured bank debt into equity. The debt was previously held across twelve silos, but is now streamlined with a single collateral silo. The company also raised $350 million in new financing pursuant to the plan.
Seadrill says the new streamlined capital structure and substantial liquidity provide the company with secure footing to pursue opportunities in the offshore drilling industry and grow value for stakeholders.
“Our emergence from Chapter 11 concludes the realignment of our balance sheet. I am grateful to all our employees, customers, partners, suppliers, creditors and shareholders for their support through this long process,” said Stuart Jackson, CEO of Seadrill.
“Our restructured balance sheet provides us greater liquidity and lower debt leverage. With this firm financial footing established and market recovery well underway, Seadrill will focus on disciplined capital investment, cost containment, and contract risk management to maintain its position as a leader in the reshaping of the industry,” Jackson added.
Seadrill emerges with total cash of $486 million and $300 million of first-lien new-money debt. The company has also issued approximately 50 million New Common Shares, of which just 0.25% are owned by former shareholders of predecessor Seadrill Limited, including Norwegian billionaire John Fredricksen, who was once Seadrill’s largest shareholder through his family fund Hemen Holdings.
“I am pleased to have been selected to chair the new Board of Directors who collectively bring commercial, operational and financial expertise to guide Seadrill as it takes its place in reshaping the offshore drilling sector,” said Julie Robertson, who has been appointed Chair of the Board. “The road to emergence from Chapter 11 has been a long one and I would like to take this opportunity to thank the outgoing board members for their diligent guidance through this process and to thank the management team and the employees for maintaining safety leadership and operational excellence through challenging times.”
Seadrill owns or operates 35 modern drilling rigs including ultra-deepwater floaters, harsh environment rigs, and high-specification jack-ups.
With the price of oil approaching $100 per barrel and tensions between Russian and Ukraine disrupting oil and gas markets, Seadrill’s emergence from Chapter 11 could be coming at a good time to catch an offshore drilling market recovery.
Sign up for our newsletter